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10 years after the 'Canned Beer Apocalypse,' decision still paying off for Oskar Blues

By Tony KindelspireLongmont Times-Call

Posted:
11/10/2012 09:00:00 PM MST

Updated:
11/12/2012 08:34:29 AM MST

Oskar Blues new state-of-the-art canning line, which went into operation earlier this year, can run close to 300 cans per minute, a far cry from the way the company started when it became the first craft brewer in the country to can its craft beers 10 years ago. (Matthew Jonas/Times-Call)
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Matthew Jonas
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The Alabama native opened Oskar Blues Grill & Brew restaurant -- named after a combination of the names of two friends of his, not the brand of harmonica often favored by blues artists -- in April 1997.

He had fallen in love with Lyons and thought his mother's Southern recipes would find an eager audience in Colorado.

Since then, Katechis has grown Oskar Blues into what can be called a modest empire. Oskar Blues' "anti-corporate" headquarters are now located in Longmont, as is its main brewery, which produced 59,000 barrels of beer in 2011, 40 percent more than the previous year.

Ten years ago Oskar Blues founder and owner Dale Katechis came up with the idea to put his craft beer in a can. Now, more than 200 craft brewers around the country have followed his lead. Over his right shoulder is an example of the original two-head filling machine he started with, and on his left is an updated version of that machine. (Lewis Geyer/Times-Call)
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LEWIS GEYER
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The brewery and the on-site Tasty Weasel tasting room just underwent $4 million in improvements, including a new state-of-the-art canning line.

The company opened its restaurant, Home Made Liquids and Solids, in Longmont in 2009. Last year, it launched its Hops & Heifers Farm, where it raises cattle for the beef served in its restaurants and grows hops that go into its beer. It also launched REEB

When: 6:30 to 11:30 p.m. Saturday, Nov. 17

What: Live music, beer specials, silent disco

Where: Oskar Blues Grill & Brew, 303 Main St., Lyons

Cycles, its own single-gear bicycle company, and it rolled out the Bonewagon, its mobile food truck, in 2011.

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A distillery -- Lyons Soul Distilling -- is working its way through the permitting process; a couple of more food venues are on tap for Longmont, loosely scheduled to open in 2013; and by the end of this year, Oskar Blues will have a new 30,000-square-foot brewery and adjacent 6,000-square-foot restaurant open in Brevard, N.C., a favorite mountain biking and relaxation spot of Katechis' for many years.

All of this is the result of what Katechis calls the "Canned Beer Apocalypse" -- his decision 10 years ago to be the first craft brewer in the country to put its beers in a can. That decision changed Katechis' life, and it changed the world of craft brewing.

'Seems like yesterday'

"I was a homebrewer on the weekend, and one of my customers was a homebrewer, so we started trading beers," Katechis said of his restaurant's early days.

In 1998, he bought some brewing equipment from a defunct brewery in California and started brewing beer in the basement of his restaurant. It was a small system, only making enough at first to sell on-site or to put in growlers patrons brought in.

Oskar Blues has rolled out a special-edition can for its 10th 'Canniversary' Celebration. (Matthew Jonas/Times-Call)
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Matthew Jonas
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He sold his first pint in the restaurant in July 1999, and later that year, Oskar Blues won a bronze medal at the Great American Beef Festival for its Reverend Sandi's Sinful Stout.

Katechis decided to put some of his beer into brown bottles, as all craft brewers did at that time, he said, and shopping them around to area liquor stores.

"We had three or four accounts," he said. "It was to drive people up to Lyons to visit our restaurant."

Katechis said he kept getting sales pitches -- via the fax machine -- from a Canadian company, Cask, that was pitching a canning system it made to small craft breweries such as his.

The thought of putting a "three-dimensional craft beer" into a can was, Katechis said, "a joke.

What the original Dale's Pale Ale design was when Oskar Blues became the first craft brewer in the country to put its beers into a can 10 years ago. This design is known around the shop today as the "pink can," founder Dale Katechis said. (Lewis Geyer/Times-Call)
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LEWIS GEYER
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"

The Cask system used a two-head filler and a hand-cranked seamer.

"They were marketing these machines to craft brewers across the country and we were the first ones to bite," Katechis said.

What convinced him, he said, was when a Cask sales rep told him, "At least give me a couple of hours to walk you through Ball. We'll visit their R&D department, and I'll show you why the can is a superior package."

That walk-through at Broomfield-based can maker Ball Corp. opened his eyes, Katechis said. He came to realize that cans are portable, and often allowed where glass isn't; they keep out light, which is bad for beer; they're easily recyclable; and they're lighter and cheaper than bottles.

"There was a moment when the laughter stopped and we said, 'This makes sense,'" he said.

But it had still never been done before. Committing to putting the beer in cans would be a risky proposition.

"When we bought this machine (from Cask) we had to commit to buying 20 pallets of cans" -- 156,000 total, Katechis said.

In its attempt to market its small-batch canning systems to craft brewers, Cask had persuaded Ball to agree to produce smaller runs of cans, instead of the millions at a time it would usually make for Anheuser-Busch or Miller, and Ball had agreed.

"We have a special relationship with Oskar Blues," said Ball spokesman Scott McCarty. "Dale had the vision to look at cans as a method of packaging (craft beer). The only issue 10 or 11 years ago was that sort of lingering misconception of the consumer that somehow product in a can is inferior. And Dale worked hard to change that, and we worked closely with him on that."

So Katechis and his team began canning Dale's Pale Ale and shopping it around to area liquor stores.

"It seems like it was yesterday. I can remember walking out of these doors with trays of beers and loading them in the truck," Katechis said. "We knew that we wanted to be the ones to bring it out to retailers because it was such a far-fetched idea. ... We had no idea it was going to work."

Any question marks soon disappeared, he said.

"We didn't quite anticipate the reception we were going to get, so we ended up building a business inside a restaurant -- a production brewery business," Katechis said.

And that far-fetched idea? More than 200 craft brewers around the country now put their beers into cans.

"I think part of why it really worked right away was their attitude," said Paul Gatza, director of the Boulder-based Brewers Association. "They came at it like, 'This is going to be fun.' It was sort of that irreverent attitude that said, 'Let's do this crazy stuff because we can do this crazy stuff.'"

Besides the fact the beer was good, the portability, being able to put craft beer where it couldn't go before -- such as on golf courses, backpacking, local softball games, even on airplanes -- was a huge reason for the instant popularity, Gatza said.

"They found something that was creating opportunities for craft beer where there wasn't an opportunity before," he said.

Today, there's more than a half-dozen Oskar Blues brands, not counting the occasional seasonal beers or brews it collaborates with other craft brewers on. For some of those specialty runs, it still uses that two-head filler, but its new canning line in Longmont can run up to 280 cans per minute.

Other Colorado breweries soon followed Oskar Blues' lead, Gatza said, and then breweries around the country started paying attention.

"We now supply eight out of the top 10 craft breweries in the U.S.," McCarty said, adding that a recent in-house study Ball did found that it made the cans for about 350 different craft brew brands.

"A lot of people laughed for a long time, but we were kind of laughing too, loading up trucks and selling beer," Katechis said.

According to the Brewers Association, craft brewers' revenues were up 14 percent through the midway point of this year and volume was up 12 percent, compared with last year. Gatza said he thinks Oskar Blues can take some of the credit for the industry's growth because it took away the stigma of cans and showed smaller brewers an easier way to get their product on store shelves.

"It gave people the idea that they could access the off-premises market as well as their own brew pub," Gatza said.

Ball continues to be a strong partner

The partnership between Oskar Blues and Ball continues to be a strong one 10 years later. Recently, Ball started manufacturing a 19.2-ounce, resealable can and approached Oskar Blues about using it for a new size of Dale's Pale Ale.

"We're the only company in North America that's making that size," McCarty said. "It's a fairly popular size in Europe."

The Imperial Pint, as Katechis calls it, will be his company's gateway into getting into convenience stores around the country.

Aside from Oskar Blues becoming available for the first time this year in Katechis' home state of Alabama, it also rolled out into two other very important markets for the company, he said: Chicago and Ohio. Coinciding with the Ohio rollout, Katechis was summoned to a meeting with representatives from the country's largest grocery chain, which was expressing interest in his company's B. Stiff & Sons Old Fashioned Root Beer.

Introduced this year, the root beer was conceived as a tribute to Brian Stiff, a Lyons resident and friend of Katechis' who died unexpectedly at age 41 in February. The root beer comes in 16-ounce, resealable cans.

"We presented it to Kroger" -- parent company of King Soopers and City Market -- "two weeks ago in Cincinnati," Katechis said. "And they said 'We'll take it' -- 2,500 stores."

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